Income Tax Act 2007 section 535

Exemption for offshore income gains

Section 535 provides an exemption from income tax for offshore income gains that accrue to charitable trusts, provided those gains are used exclusively for charitable purposes.

• Offshore income gains accruing to a charitable trust are excluded from the calculation of total income for tax purposes.
• The exemption only applies where the gain is both applicable to and actually applied for charitable purposes only.
• An "offshore income gain" takes its meaning from Chapter 5 of Part 2 of the Offshore Funds (Tax) Regulations 2009.
• If property held on charitable trusts ceases to be subject to those trusts, any resulting gain is treated as an offshore income gain that does not accrue to a charity — meaning the exemption is lost.